SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ESKIMO PIE
(Name of Registrant as Specified in its Charter)
YOGEN FRUZ WORLD-WIDE INCORPORATED
(Name of Person(s) Filing Proxy
Statement, if other than Registrant)
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<PAGE>
[Yogen Fruz World-Wide Incorporated LOGO]
8300 Woodbine Avenue
Markham, Ontario, Canada L3R 9Y7
August 26, 1999
Dear Fellow Eskimo Pie Shareholders:
Eskimo Pie Corporation has produced for shareholders generally declining
revenues, earnings and stock price for the past five years. The current Board of
Directors and Management of Eskimo Pie are responsible for these declines, but
want you to support them as they continue the same failed strategy that has
resulted in the significant loss of value for shareholders.
As the largest single shareholder of Eskimo Pie, Yogen Fruz wants nothing
more than the greatest possible return for itself and Eskimo Pie's other
shareholders. We believe that the sum of the values of the parts of Eskimo Pie
is greater than the value of the company as a whole, and that the way to realize
this value for shareholders is to sell each of the parts of Eskimo Pie to a
highly synergistic buyer capable of integrating the asset into the buyer's
existing business.
In fact, Eskimo Pie's announcement on August 25, 1999 that it is selling
its flavors business to Guernsey Bel, Inc. for $9.5 million is exactly what we
told you in our proxy we will do if you appoint our slate of directors - we even
predicted the price and identified the buyer in our additional proxy materials
filed with the SEC on August 23, 1999. However, our plan is for the $9.5 million
- - and all other proceeds from the sale of Eskimo Pie's assets - to go directly
you and the other shareholders of Eskimo Pie, not to subsidize a continuation of
the failed strategy of the current Board of Directors and Management.
WHOSE INTERESTS ARE TRULY SELF-SERVING?
o The current Board of Directors and Management of Eskimo Pie claim to be
implementing a plan to increase investments in advertising, promotion and
product development for the Eskimo Pie brand, and that the results can be
seen in the year to date financial performance of the Company. However,
contrary to the Company's reported "increases", actual consumer purchases
of Eskimo Pie brand products are down versus last year during the peak
selling period of April-June, a fact confirmed by independent market data.
Welch's brand products are also down versus last year. The Eskimo Pie and
Welch's brands account for more than two thirds of all Eskimo Pie products
sold. If both brands are experiencing decreases versus last year, how can
Eskimo Pie report increased revenues and earnings?
o Eskimo Pie's revenues consist primarily of sales of ingredients and
packaging to its licensees. Even if sales of finished products by the
licensees are down - as they were during the critical second quarter this
year - Eskimo Pie can still "make its numbers" and report "increases" by
shipping excess quantities of ingredients and packaging to its licensees.
However, such "increases" are only temporary. Inevitably, decreased sales
of Eskimo Pie products to consumers will translate to decreased revenues
and earnings of Eskimo Pie, as they have for the past five years. The
current Board and Management ask you to look at the results for only the
last six months. However, as shareholders, we must ask: did the Board and
Management of Eskimo Pie have a vested interest in creating the appearance
of growth to convince shareholders to vote against Yogen Fruz's proposals
and thereby save their own jobs?
<PAGE>
YOGEN FRUZ - FOCUSED ON SHAREHOLDER VALUE
o Yogen Fruz believes that all shareholders of Eskimo Pie will suffer
continued losses of value if the current Board and Management are allowed
to maintain the status quo. However, by selling all of the assets of Eskimo
Pie - not just Eskimo Pie's Flavors business - we shareholders can realize
actual gains.
o Eskimo Pie's current Board of Directors and Management have suggested that
Yogen Fruz could gain competitively - as opposed to as a shareholder - by
selling Eskimo Pie's assets. They are wrong. Yogen Fruz does not compete
with Eskimo Pie Corporation, but rather, with certain of Eskimo Pie's
brands. This will continue to be the case after Eskimo Pie no longer owns
them. The potential buyers we have identified are, in general, financially
stronger than Eskimo Pie Corporation and better positioned to exploit the
full potential of these brands. It is precisely for this reason that they
are able to pay the best price to buy these assets.
o The current Board of Directors has claimed that Yogen Fruz might attempt to
purchase Eskimo Pie after "taking control" of the Company. However, Yogen
Fruz and its nominees for directors have publicly affirmed that they will
not buy any assets of Eskimo Pie, nor will they accept any fees or
compensation of any kind for their services as directors or in transacting
the sale of Eskimo Pie's assets. Moreover, the Virginia Stock Corporation
Act forbids Yogen Fruz from purchasing Eskimo Pie or any assets of Eskimo
Pie at any time before December 4, 2001, without approval of a majority of
the disinterested directors and two thirds of the voting shares excluding
shares owned by Yogen Fruz.
o It is important to note that Eskimo Pie's current Board of Directors and
Management have not disputed Yogen Fruz's statements regarding the
potential return to shareholders from the sale of Eskimo Pie's assets.
Instead, they speculate as to Yogen Fruz's "agenda" or motive. However, our
agenda is out in the open: we want the highest price for the stock of
Eskimo Pie. That is why we announced on August 23, 1999 that we will not
support the offer of an unnamed investor group to purchase Eskimo Pie for
$10.125 per share. As a shareholder of Eskimo Pie, we are alarmed that the
current Board of Directors has formed a special committee to entertain this
offer, which, as we said in our public announcement, we believe understates
the assets value of Eskimo Pie by at least one third. Previously, the Board
determined to reject offers below $13.00 per share. Why do they now
consider $10.125 per share a reasonable price for Eskimo Pie?
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PLEASE ALSO SEE THE ATTACHED PRESS RELEASE
- --------------------------------------------------------------------------------
WE AGREE: COMPARE MANAGEMENT PERFORMANCE
o Yogen Fruz welcomes Eskimo Pie's invitation to compare our operating
results with those of Eskimo Pie. However, we think performance over the
last five years would be a truer test than focusing on the partial results
of the current fiscal year. In fact, Yogen Fruz's revenues have grown
dramatically from Cdn$4,979,000 in 1994, Cdn$9,186,000 in 1995,
Cdn$30,039,000 in 1996, Cdn$43,788,000 in 1997 to Cdn$87,979,000 in 1998.
Earnings have grown just as dramatically, from Cdn$756,000 in 1994,
Cdn$1,842,000 in 1995, Cdn$5,183,000 in 1996, Cdn$9,937,000 in 1997 to
Cdn$12,941,000 in 1998. As a result of these results, Yogen Fruz
shareholders have enjoyed excellent liquidity and appreciation in value
from per share highs of Cdn$1.31 in 1994, Cdn$2.50 in 1995, Cdn$4.35 in
1996, Cdn$8.70 in 1997 to Cdn$14.30 in 1998. (All years are Yogen Fruz's
fiscal years ending August 31.) Even at Yogen Fruz's current share price of
Cdn$2.53
<PAGE>
(August 26, 1999), Yogen Fruz is valued in excess of Cdn$116 million. Such
long-term growth is exactly what Eskimo Pie's current Board of Directors
and Management has been unable to achieve for their shareholders. Indeed,
by contrast, Eskimo Pie would be valued at only $36 million, based on the
offer of $10.125 per share currently being entertained by Eskimo Pie's
Board of Directors. And, as noted above, Eskimo Pie's core brands are
actually down versus last year during the second quarter, belying Eskimo
Pie Corporation's reported "increases".
o Yogen Fruz believes the continued operation of Eskimo Pie by any management
team is incapable of returning maximum value to shareholders, and that the
maximum return to shareholders will be achieved by selling the assets of
Eskimo Pie to highly synergistic buyers. The only reason Yogen Fruz is
soliciting your proxy is because the current Board of Directors and
Management has demonstrated an unwillingness to pursue this course.
YOUR VOTE IS IMPORTANT!
o No matter how many or how few shares of Eskimo Pie Corporation you own,
please vote FOR Yogen Fruz's nominees and AGAINST management's proposals by
signing, dating and mailing the enclosed BLUE PROXY CARD.
o Do not return any WHITE proxy card sent to you by Eskimo Pie Corporation,
even to vote against their nominees. Doing so will cancel your vote for
Yogen Fruz's nominees.
o If you have already returned a proxy card sent to you by Eskimo Pie
Corporation, you have every right to change your vote by signing, dating
and returning the enclosed BLUE PROXY CARD. Only your latest dated,
properly executed card will count.
o If you own shares in the name of a brokerage firm, your broker cannot vote
such shares unless they receive your specific instructions. Please sign,
date and return the enclosed BLUE PROXY CARD in the postage-paid envelope
that has been provided.
If you have any questions or need assistance voting your shares, please call
collect:
Michael Serruya
Co-Chairman and Co-CEO
Yogen Fruz World-Wide Incorporated
8300 Woodbine Avenue
Markham, Ontario, Canada L3R 9Y7
(905)479-8672(x225)
PROTECT YOUR INVESTMENT
VOTE YOGEN FRUZ'S BLUE PROXY CARD
DO NOT VOTE ON THE WHITE PROXY CARD - DISCARD IT
<PAGE>
Eskimo Pie Corporation
Unit Sales Performance Decline
13 Weeks Ending June 27, 1999
vs YR Ago
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL]
Eskimo Pie -6.3%
Welch's -7.9%
Nabisco SnackWell -45.3%
Nabisco Oreo Bar -22.9%
Source: IRI
<PAGE>
Eskimo Pie Corporation
Unit Sales Performance Decline
4 Weeks Ending June 27, 1999
vs YR Ago
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL]
Eskimo Pie -10.2%
Welch's -16.3%
Nabisco SnackWell -40.5%
Nabisco Oreo Bar -39.2%
Source: IRI
<PAGE>
FOR IMMEDIATE RELEASE
YOGEN FRUZ WILL NOT SUPPORT
ANNOUNCED OFFER TO BUY ESKIMO PIE CORPORATION
Toronto, Canada, August 23, 1999 - Yogen Fruz World-Wide Incorporated (TSE:
YF.A) the largest shareholder of Eskimo Pie Corporation (NASDAQ NNM: EPIE)
("Eskimo") announced today that it will not support the offer from an
undisclosed private investor group to buy all of Eskimo's stock for $10.125 per
share announced earlier today.
"We believe the announced offer understates the asset value of Eskimo by at
least one third, and thus would not return full value to Eskimo's shareholders"
said Michael Serruya, Co-President and Co-CEO of Yogen Fruz.
Eskimo's announcement of the offer did not disclose the identities of the
offerors, but did state that the offer was subject to satisfactory completion of
due diligence, obtaining of necessary financing, negotiation and execution of a
definitive agreement and consent of Eskimo's licensors to the continuation of
their licenses. Accordingly, Yogen Fruz believes it is unlikely any such sale
would close.
"This proposal clearly would be a better deal for Eskimo's current management
than for the shareholders," Serruya said. "They would hold onto their jobs,
while shareholders would take a one-third discount off the full value for their
shares." Eskimo's announcement disclosed that David B. Kewer, Eskimo's President
and CEO, has been invited to join the unnamed group of offerors.
As of August 31, 1998, Yogen Fruz had approximately 4,900 locations, through
company owned, franchised and non-traditional partnership locations in 80
countries. The Company operates a Family of Brands including Yogen Fruz, I Can't
Believe It's Yogurt, Bresler's Ice Cream and Premium Frozen Yogurt, Swensen's
Ice Cream, Steve's Ice Cream, Golden Swirl, Honey Hill Farms, Paradise, Ice
Cream Churn and Java Coast Fine Coffees. The Company also directly, and through
its subsidiary Integrated Brands, markets, sells and distributes a variety of
frozen novelties and frozen dessert products under the Tropicana, Betty Crocker,
Trix, Yoplait, Colombo and Yoo Hoo brand names, pursuant to long-term license
agreements.
For further information, contact:
Michael Serruya
Co-Chairman, Co-President and Co-CEO
Yogen Fruz World-Wide Incorporated
Tel:905-479-8762 (x225)
Fax: 905-479-5235
<PAGE>
ESKIMO PIE CORPORATION
ANNUAL MEETING OF SHAREHOLDERS -- SEPTEMBER 8, 1999
THIS PROXY IS SOLICITED BY YOGEN FRUZ WORLD WIDE INCORPORATED
IN OPPOSITION TO THE ESKIMO PIE CORPORATION BOARD OF DIRECTORS
AND FOR THE AMENDMENT OF ESKIMO PIE'S BY-LAWS
The undersigned shareholder of Eskimo Pie Corporation ("Eskimo") hereby
appoints ________, _________ and ___________, each of them with full power of
substitution, to vote all shares of Common Stock, par value $1.00 per share, of
Eskimo that the undersigned is entitled to vote if personally present at the
1999 Annual Meeting of Shareholders of Eskimo to be held on September 8, 1998,
and at any adjournments or postponements thereof as indicated below and in the
discretion of the proxies, to vote upon such other business as may properly come
before the meeting, and any adjournment or postponement thereof. The undersigned
hereby revokes any previous proxies with respect to matters covered by this
Proxy.
YOGEN FRUZ WORLDWIDE INCORPORATED RECOMMENDS A VOTE FOR PROPOSALS 1 THROUGH 3.
PROPOSAL 1. (ELECTION OF YOGEN SLATE OF DIRECTORS) to elect the following
individuals as Directors of Eskimo until the 2000 Annual Meeting of
Shareholders: Michael Serruya, Aaron Serruya, David Prussky, David M.
Smith, David J. Stein, Benjamin Raphan and Edward Obadiah.
(To withhold authority to vote for any individual nominee listed above, write
that nominee's name in the space provided below)
[ ] FOR ALL NOMINEES LISTED ABOVE
[ ] AGAINST ALL NOMINEES LISTED ABOVE
[ ] ABSTAIN WITH RESPECT TO ALL NOMINEES LISTED ABOVE
PROPOSAL 2. (By Law Amendment with respect to Rights Agreement) to amend the
by-laws to require the Eskimo Board of Directors to carry out a resolution
authorizing partial or complete redemption or amendment to the Eskimo
Rights Agreement, if such resolution is authorized and approved by
affirmative vote of shareholders owning or having the right to vote at
least a majority of the capital stock of Eskimo.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 3. (By Law Amendment with respect to Special Meeting) to amend the
by-laws to allow the shareholders owning or having the right to vote at
least 5% of the outstanding capital stock of Eskimo to call a special
meeting of shareholders.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER SPECIFIED BY THE
UNDERSIGNED SHAREHOLDER. IF NO MARKING IS MADE, THIS PROXY WILL BE DEEMED TO BE
A DIRECTION TO VOTE FOR PROPOSALS 1 THROUGH 3 AND IN THE DISCRETION OF THE
PROXIES, TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING, AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
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(Date)
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(Signature)
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(Title)
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(Signature, if held jointly)
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, guardian, corporate officer or
partner, please give full title as such. If a corporation, please sign in
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by an authorized person. This Proxy votes all
shares held in all capacities.
